Azure Tagging Strategies and Best Practices

We all know that Azure provides agility and flexibility to enable organizations to scale their business and IT infrastructure on cloud. However, as the creation and consumption of resources in dynamic Azure environments increase, it becomes very difficult and cumbersome to track each and every resource.

In a worst-case scenario, your developers and IT admins might be creating and running new resources without you being aware of them until suddenly their incurred costs show up in your monthly bills like a nightmare.

Establishing a proper tagging strategy across your cloud and assigning Azure tagging policies for efficient resource and cost management is essential to avoid such bill-shocks.

What are Tags in Azure?

Azure Tags are a part of the Azure Resource Manager (ARM) model that can be and should be leveraged to track, organize and group your resources and analyze costs incurred by them. Also, tagging helps automate deployments of resources in your Azure environment.

But, before we jump into tagging best practices and strategies, let’s understand the structure and components of an Azure tag.

Azure tags are user-defined key-value or name-value pairs that enable you to organize, manage, and automate resources in the cloud environment. To create a tag, you need to define a tag name and a value corresponding to that name and “Apply” it to your resources. A single tag name or key can have multi-dimensional values.

For example, you can create a key named “BusinessUnit” and generate different values for the same, such as “Finance,” “Marketing,” “Shared,” etc., and assign them to respective resources.

The standard structure/syntax of a tag is Key : Value.

Below are some examples of commonly used Azure tags:

BudgetAmount : $150,000

BusinessUnit : Product ABC

Owner : [email protected]

NOTE: Tag names and tag values are case-sensitive.

Azure Tagging Strategies and Best Practices

Implementing the following best practices for tagging your resources in Azure will help you gain better visibility into and control over your existing cloud ecosystem:

1. Define a Standard Taxonomy and Naming Convention for Tagging Resources

A proper naming convention should be defined as it is important to incorporate a sense of accountability of resource usage and raise cost awareness in all your teams. Your tagging schemes can be IT-aligned based on environment, workload, function, etc., as well as business-aligned relating to aspects like cost center, owner, business criticality, and so on.

It is recommended that you use a standard taxonomy to logically organize and manage your resources, resource groups, and subscriptions in Azure. A well-designed, hierarchical naming convention adopted organization-wide helps maintain consistency and identify the purpose of resource consumption.

There are various ways to tag resources. For example, you can tag and group resources by the environment based on the type they are used for, such as “Development,” “Staging,” or “Production.”

2. Tag your Resources When You Create Them

Another effective tagging strategy that you should practice is applying tags to resources right when you create them. Tagging resources early on, at the time of their creation, makes the management more streamlined and easier.

Retroactive application of tags (i.e., assigning tags post-resource creation) is an inefficient, unsystematic process with additional administrative overheads.

3. Automate Tagging and Enforce Azure Policies for Effective Resource Management

For further optimization, you should automate the tagging process using Azure Resource Manager (ARM) templates, PowerShell, or Azure command-line interface (CLI). To maintain a consistent naming convention, you should create reusable standard templates or scripts. For example, tags can be applied to a virtual machine (VM) using PowerShell Cmdlets.

In addition, it is also essential that you define tagging standards and enforce Azure policies to avoid inconsistency in the naming scheme and use of obsolete tags. Applying tagging rules and policies to all resources not only allows you to control their usage but also helps keep the costs down. Creating a policy automatically tags specified resources and ensures that resources missing necessary tags do not get deployed or added to your Azure subscriptions.

Therefore, automated tagging with set policies saves you the trouble of manually assigning tags or searching for every non-compliant resource.

Cost Management and Governance with Azure Tagging

Establishing the above-explained tagging strategies across the system enables you to track key factors of a resource, such as its owner, purpose, utilization, and costs incurred. With this degree of in-depth visibility into your Azure environment, cost governance and resource management get seamless.

Moreover, you can apply a cost allocation tag (e.g., cost center) to a resource group so that the team or the owner will be accounted for the costs of running the resources in that group. Another benefit of using tags is to group resources into one that allows you to delete the entire group when you no longer need those resources. This helps discard all the orphaned or zombie resources that could possibly be left running, racking up your costs.

However, it is crucial that you review your resources by tags regularly for end-to-end control.

CloudMonitor can help!

CloudMonitor’s real-time monitoring framework provides actionable insights into your dynamic cloud environment. Besides, its auto-tagging feature and detailed cost reports enable you to track the origin of unnecessary spikes in cloud spend and improve the overall cost governance.

To analyze how much money you save on your cloud resources, get started with Free Trial!

Rodney Joyce

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